FDIC finalizes stablecoin regulatory framework; crypto-friendly bank Erebor obtains insurance license

The Federal Deposit Insurance Corporation (FDIC) released a key proposal this Tuesday, clarifying the pathway for traditional banks to apply for issuing payment stablecoins through subsidiaries. This marks an important first step in the implementation of the milestone “GENIUS Act.” On the same day, the FDIC approved deposit insurance for Erebor Bank N.A., supported by tech giants like Peter Thiel, led by Erebor Bank N.A., signifying that crypto-friendly banks have officially entered the federally insured banking system. These two measures together demonstrate that U.S. financial regulators are incorporating crypto assets, especially stablecoins, into the mainstream financial regulatory framework with unprecedented clarity and speed, paving the way for industry compliance and development.

FDIC Regulatory Framework Implementation: The “Operation Manual” for Bank-issued Stablecoins

The U.S. financial regulatory system is writing a concrete “operation manual” for the era of stablecoins. The framework draft proposed by the FDIC this week provides a clear application and evaluation process for insured banks intending to issue payment stablecoins. The framework requires banks to operate stablecoin businesses through independent subsidiaries, with the FDIC conducting a “tailored” assessment of the safety and soundness of such subsidiaries.

According to the proposal, the FDIC’s review will be exceptionally strict and comprehensive. Regulators must assess whether the subsidiary can meet the monthly reserve requirements and publicly disclose the composition of reserves on its official website to ensure compliance with the “GENIUS Act” requirement of 1:1 dollar asset backing. Additionally, the review will include whether the subsidiary meets upcoming capital and liquidity requirements, as well as its operational, compliance, and information technology risk management capabilities. The FDIC even has the authority to review whether management personnel have felony records related to insider trading, embezzlement, or other serious crimes, to control risks from the source.

FDIC Acting Chairman Travis Hill stated that this “tailored” process is a “key first step” in implementing the “GENIUS Act.” He revealed that the FDIC plans to propose another regulation early next year aimed at imposing prudential requirements on certain issuers. This indicates that the current framework is just the beginning of building a comprehensive stablecoin regulatory system, with more detailed rules to follow.

Case Study: Erebor Bank’s FDIC Insurance Milestone Significance

On the same day the FDIC announced the stablecoin framework, a bank with a strong crypto flavor received a historic approval. Supported by well-known Silicon Valley investor Peter Thiel and co-founder of Anduril Industries Palmer Luckey, Erebor Bank N.A. successfully obtained FDIC deposit insurance coverage.

This is a highly valuable “security certificate.” Gaining FDIC insurance means that even if the bank fails, Erebor’s depositors’ funds within the legal limits are protected by the U.S. government-backed safety net. This greatly enhances customer confidence and marks the first time that crypto-native or crypto-friendly banking institutions are officially integrated into the core of the U.S. federal financial safety system. The FDIC set conditions for approval, requiring Erebor to adhere to deposit handling procedures in the event of bank insolvency and to maintain an appropriate Tier 1 leverage ratio during the first three years of operation.

Erebor’s approval is not an isolated case but a reflection of the crypto-friendly environment fostered under the Trump administration. Previously, the Office of the Comptroller of the Currency (OCC) conditionally approved Erebor’s national bank charter in October. OCC officials have expressed a commitment to building a “vibrant and diverse federal banking system.” Recently, five crypto companies have received preliminary approval to perform specific banking functions. Although traditional banks have expressed concerns about potential increased consumer risks and threats to financial stability, regulators are clearly opening a compliant pathway for fintech and crypto firms to enter the mainstream financial system.

Core Points of the FDIC Stablecoin Regulatory Framework

Regulatory Goal: Provide a clear and safe application pathway for banks to issue payment stablecoins through subsidiaries, implementing the “GENIUS Act.”

Key Requirements:

• Reserve Management: Subsidiaries must be capable of meeting monthly reserve requirements and disclose reserve asset composition publicly to ensure 1:1 dollar backing.
• Comprehensive Risk Assessment: The FDIC will evaluate the applicant’s capital, liquidity, operational, compliance, and IT risk management capabilities.
• Personnel Qualification Review: Management must have no felony convictions related to financial crimes.

Approval Conditions (e.g., Erebor Bank):

• Deposit Insurance: Must follow deposit handling procedures in case of bank failure.
• Capital Requirements: Maintain appropriate Tier 1 leverage ratio during initial operation (e.g., within three years).

The “Double-Act” of Regulation: How to Shape a New Pattern for the Crypto Industry

The “regulatory double act” played by the FDIC on the same day—setting rules for stablecoin issuance and licensing crypto banks—is no coincidence. It clearly outlines the strategic path for integrating crypto assets into the existing U.S. financial regulatory framework. The core of this path is “banking” and “compliance”, aiming to leverage proven regulatory tools (such as deposit insurance and capital adequacy) to manage risks brought by crypto innovation.

For the stablecoin market, the FDIC framework implies that issuance rights will further concentrate within the existing, strictly regulated banking system. Major traditional financial institutions like JPMorgan Chase and Société Générale can leverage their inherent compliance advantages and customer bases to more smoothly enter the stablecoin market. This could alter the current market landscape dominated by private companies like USDT and USDC, promoting stablecoins as a compliant bridge connecting traditional finance and decentralized finance (DeFi).

For the entire crypto industry, Erebor Bank’s case symbolizes the recognition of “crypto banks” as a new species with official certification. The Federal Reserve is considering providing so-called “lite” main accounts for fintech and crypto companies, allowing them to access the Fed’s payment system under certain restrictions. Once realized, these companies will gain near-bank-level payment channels, greatly improving capital efficiency and reducing operational costs. As pointed out in Binance Research, regulatory clarity is becoming a key driver for institutional capital inflow and industry maturity.

The Global Perspective: Competition and Regulatory Philosophies in Stablecoin Development

The U.S. advancing the “GENIUS Act” and related rules through rapid regulatory measures has attracted worldwide attention and diverse reactions. The act explicitly requires stablecoins to be 100% backed by USD assets. Its strategic intent is widely interpreted as consolidating dollar dominance in the digital age and even opening a “second battlefield” supported by global stablecoin users for U.S. debt. Institutions like the Bank for International Settlements and the Bank of England have expressed concerns, warning that this could erode other countries’ monetary sovereignty and financial stability.

Unlike the U.S. path of deeply tying stablecoins to dollar hegemony, other financial centers have adopted different regulatory philosophies. For example, Hong Kong’s “Stablecoin Regulations” do not require stablecoins to be dollar-pegged but allow multi-currency reserves and establish a strict framework of “rigid reserves + criminal accountability + cross-border jurisdiction” to compete for dominance in Asia’s digital financial infrastructure. The EU’s “Markets in Crypto-Assets Regulation” (MiCA) imposes strict trading volume limits on non-Euro stablecoins within the EU.

This global regulatory competition and philosophical divergence mean that stablecoin issuers and crypto enterprises will face a more complex but also more selective international environment. Companies will need to weigh their strategies across different jurisdictions, and the outcome of this race will profoundly influence the future global digital financial landscape.

The FDIC’s one-day “one framework, one license” marks a critical turning point from legislative debate to detailed implementation in U.S. crypto regulation. It sketches a blueprint for compliant stablecoin issuance and opens the door for crypto banks to integrate into the mainstream system. This is not only about clarifying procedures but also about signaling: crypto assets, especially stablecoins intended as payment tools, will grow in an environment of transparency, control, and risk isolation from traditional finance. While different financial centers have varying views on this path, the race is underway. Undoubtedly, the U.S. is attempting to extend its dominance in traditional finance into the digital frontier by rapidly establishing rules. For industry participants, the era of complaining about regulation as “burdensome” is over; proactively adapting to, utilizing, and even shaping these new rules will become the core competitive advantage in the next phase.